Fed to Settle ACH Transactions on Same Day

The Federal Reserve Board said Friday it will settle automated clearing house credit transactions when posted, instead of one business day later.

The change will take effect in early 2001, after the 12 Federal Reserve Banks modify their computer software. Currently, these transactions can be reversed by a Reserve Bank if it does not actually receive funds from an originating financial institution. The Reserve Banks will require institutions they deem riskier to provide funds for settlement in advance.

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